We don't know anyone who loves saving a lot of money only to a) be told they need more or b) spend it all in one place. But, that's too often the reality for buyers when it comes to down payments.
Not to mention, with rising home prices, down payments are higher and higher. Are your buyers down and out about their upcoming potential purchase? Here's how you can help.
Saving for a Down Payment
Regardless of the client is a first time buyer or a seasoned real estate mogul - down payments typically require some planning and budgeting. If your clients are saying they can't afford a down payment or wondering if they'll ever break into the real estate sphere, offer them some of these ideas:
- Sell what they don't use. Furniture, tech, cars - whatever it is - if it's taking up space - sell it for $$$.
- Side hustle, anyone?
- Put as much in savings as possible (duh, but it's true).
- Cook at home
- For a short while contribute less to retirement accounts (re-up as soon as you've saved enough)
- Work out at home
- Get rid of as much debt as possible
Of course, there's always buyer assistance loan programs that take away that 10 or 20% down payment specification in order to service more people. Some loan programs can get buyers into homes for as little as 3.5% down. But, beware, that means client's monthly payment on their mortgage will be much higher.
Now What?
Don't forget about FHA Loans, like the ones mentioned above, which require lower down payments. What clients really need to focus on is their monthly payments. With the right agent and lender - buyers should be able to find a loan program that works for them and their down payment budget. But, there aren't programs out there for consistently not affording their monthly payments on their mortgage. As an agent, be sure that your client fully understands their mortgage payments prior to signing the deal.
Down payments don't have to rain on the parade of every buyer - even in a market where bidding wars are aplenty. Sure, typically the higher the better, but luckily there are workarounds in place to ensure more people can become homeowners.
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